Shanghai: SSE Composite Index (.SSEC) enters a bull market
Major Asian stocks markets closed higher on Monday amid trade optimism after U.S. President Donald Trump announced a postponement of a closely-watched deadline on March 1.
Shares in mainland China saw solid gains on the day following the positive developments. The Shanghai composite surged 5.6 percent to 2,961.28 while the Shenzhen component added 5.587 percent to 9,134.58. The Shenzhen composite jumped 5.417 percent to 1,557.27.
Those moves took the Shanghai composite into bull market territory, or up at least 20 percent from intraday lows seen in early January. The Shanghai composite fell into a bear market, or down 20 percent from a recent high, in June 2018.
“As both (the U.S. and Chinese) Presidents said significant progress has been made, the chance for the US and China to reach a deal is getting higher,” OCBC Treasury Research said in a morning note. “However, the key to medium term stability hinges on two areas including agreement on China’s structural reforms and the enforcement of trade deals.”
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 2,687.32.
The projected upper bound is: 3,068.80.
The projected lower bound is: 2,875.25.
The projected closing price is: 2,972.02.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 99.1533. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 83.71. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 3 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 202.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 15 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 31 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 3.562 at 2,964.845. Volume was 95% below average (consolidating) and Bollinger Bands were 119% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 2,787.65 2,607.97 2,755.12
Volatility: 36 23 25
Volume: 25,677,584,384 16,437,694,464 14,640,342,016
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
SSE COMPOSITE gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
SSE COMPOSITE is currently 7.6% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 25 periods. Our momentum oscillator is currently indicating that .SSEC is currently in an overbought condition.
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